Results of the First Quarter Ended April 30, 2008 - ADF Group Inc. More than Double its Revenues, Net Earnings and Order Backlog in One Year



    
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    - Revenues increased by 130% to $25.2 million.
    - Net earnings more than doubled reaching $3.2 million.
    - Long-term debt below the $10 million mark, as at April 30, 2008.
    - Order backlog reached $148 million, up 131% over the previous year.
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    TERREBONNE, QC, June 4 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the
"Corporation") (TSX: DRX) posted revenues of $25.2 million for the first
quarter ended April 30, 2008, up 130% over the same period of the previous
year.
    Gross margin before foreign exchange variation grew by 81% to
$7.1 million, or 28% of first-quarter revenues. In addition to the revenue
increase, this margin was positively affected by our order execution
efficiency.
    On account of the significant reduction in debt during prior periods and
liquidities on hand, our financial expenses decreased considerably, to
represent only 0.4% of revenues.
    Consequently, net earnings jumped 131% to $3.2 million or $0.09 basic and
diluted per share.
    Our operating activities provided cash flows of $2.9 million, of which
$0.4 million was used to repay long-term debt and $2.3 million was primarily
invested in production equipment, consistent with our ongoing facility and
plant efficiency enhancement program.
    The Corporation ended the period as at April 30, 2008 with working
capital of more than $28 million and an increase of some 5% in shareholders'
equity, reflecting our operating profitability, and a long-term debt under the
$10 million mark.
    Commenting on ADF's financial performance, Mr. Jean Paschini, Chairman of
the Board and Chief Executive Officer, said "we are pleased with this
performance and the steady improvement in our financial position. We maintain
our guidance for revenues between $80 million and $100 million for the current
fiscal year. Considering our backlog of orders in hand and based on results
for our first quarter ended April 30, 2008, we can confirm we are on track to
achieve this objective, especially since the non-residential construction
industry remains very dynamic and should foster sustained growth in our
business."
    The Corporation is currently in negotiation for various potential
projects totalling some $395 million in North America and abroad.
    During the first quarter, ADF was awarded an additional contract worth
$5.2 million at Miami International Airport in Florida for the supply of raw
materials (steel), the connection engineering and fabrication work, and the
installation of structural steel and miscellaneous metals at an existing
terminal.
    The Corporation's backlog reached $148 million as at April 30, 2008
compared with $64 million last year, representing an increase of 131%. The
backlog will be executed over a six to 18 month period.

    ANNUAL GENERAL MEETING

    The Annual General Meeting of Shareholders of ADF Group Inc. will be held
on Wednesday, June 4, 2008, at 11:00 am at the Omni Mont-Royal Hotel in
Montreal.

    ABOUT ADF

    ADF Group Inc. is a North American leader in the design, engineering,
fabrication and selective installation in the non-residential construction
industry of complex steel superstructures, as well as in architectural metal
work. ADF is one of the few players in the industry capable of handling highly
technically complex mega projects on fast-track schedules in the commercial,
institutional, industrial and public sectors.

    FORWARD-LOOKING INFORMATION

    This press release contains forward-looking statements reflecting ADF
objectives and expectations. These statements are identified by the use of
verbs such as "expect" as well as by the use of future or conditional tenses.
By their very nature these types of statements involve risks and uncertainty.
Consequently, reality may differ from ADF's expectations.
    All amounts are in Canadian dollars.

    
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                       CONFERENCE CALL WITH INVESTORS:
                       TO DISCUSS ADF GROUP'S RESULTS
                 FOR THE FIRST QUARTER ENDED APRIL 30, 2008

             Wednesday, June 4, 2008 at 10:00 am (Montreal time)

       To participate in the conference call, dial 1-800-733-7571 a few
                    minutes before the start of the call.

        For those unable to participate, a taped re-broadcast will be
            available from Wednesday June 4, 2008 at 12:00, until
                     midnight Wednesday, June 11, 2008,
              by dialing 1-877-289-8525; access code 21272763#

             The conference call (audio) will also be available
         simultaneously at www.adfgroup.com and archived for 90 days.

               Members of the media are invited to listen in.
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    CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
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    Periods ended April 30,                               Three-       Three-
    (In thousands of $, except                            month        month
     per-share amounts)                                    2008         2007
                                                      -----------------------
                                                              $            $

    REVENUES                                             25,159       10,919
    Cost of good sold                                    18,044        6,989
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    Gross margin before foreign exchange variation        7,115        3,930
    Loss on foreign exchange                                 60          439
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    Gross margin                                          7,055        3,491
    Selling and administrative expenses                   1,215        1,240
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    Earnings before the undernoted items:                 5,840        2,251
    Amortization
      Amortization of intangible assets                      13          124
      Amortization of property, plant and equipment         583          566
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                                                            596          690
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    Earnings before financial charges and income taxes    5,244        1,561
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    Financial charges
      Interest on long-term debt                            126          507
      Interest income                                       (85)         (39)
      Other interest and financial charges                   54           25
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                                                             95          493
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    Earning before income taxes                           5,149        1,068
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    Income taxes
      Current                                               168           40
      Future                                              1,747         (375)
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                                                          1,915         (335)
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    Net earnings and comprehensive income                 3,234        1,403
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    Basic earnings per share                               0.09         0.05
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    Diluted earnings per share                             0.09         0.04
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    Average number of outstanding shares (in thousands)  36,106       30,862
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    Average number of diluted outstanding
     shares (in thousands)                               37,309       31,967
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    CONSOLIDATED STATEMENTS OF DEFICIT
    ----------------------------------

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    Periods ended April 30,                               Three-       Three-
    (In thousands of $)                                   month        month
                                                           2008         2007
                                                      -----------------------
                                                              $            $

    Deficit, beginning of the period                    (75,274)    (108,365)
    Net earnings                                          3,234        1,403
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    Deficit, end of the period                          (72,040)    (106,962)
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    CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS
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    Periods ended April 30,                               Three-       Three-
    (In thousands of $)                                   month        month
                                                           2008         2007
                                                      -----------------------
                                                              $            $

    Contributed surplus, beginning of the period          1,965        1,988
    Stock options-based compensation                         49           44
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    Contributed surplus, end of the period                2,014        2,032
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    CONSOLIDATED BALANCE SHEETS
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    (In thousands of $)                                      At           At
                                                       April 30,  January 31,
                                                           2008         2008
                                                                    (Audited)
                                                      -----------------------
                                                              $            $
    ASSETS
    Current
      Cash and cash equivalents                           7,924        7,686
      Accounts receivable                                23,101       17,877
      Holdbacks on contracts                              3,417        3,158
      Work in progress                                      518        1,312
      Inventories                                         2,620        2,551
      Prepaid expenses                                      329          266
      Income taxes                                          221          181
      Future income tax assets                           10,988       11,660
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                                                         49,118       44,691
    Holdbacks on long-term contracts                        532          345
    Property, plant and equipment                        34,710       33,082
    Intangible assets                                     1,407        1,153
    Other assets                                            328          328
    Future income tax assets                             12,051       13,066
    Investment tax credits                                2,514        2,514
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                                                        100,660       95,179
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    LIABILITIES
    Current
      Credit facility                                         -            -
      Accounts payable and accrued charges               11,773        9,775
      Deferred revenues                                   6,626        6,066
      Current portion of long-term debt                   2,437        2,228
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                                                         20,836       18,069
    Long-term debt                                        7,511        8,089
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                                                         28,347       26,158
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    Shareholders' Equity
      Deficit                                           (72,304)     (75,538)
      Accumulated other comprehensive income                264          264
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                                                        (72,040)     (75,274)
      Capital stock                                     142,339      142,330
      Contributed surplus                                 2,014        1,965
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                                                         72,313       69,021
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                                                        100,660       95,179
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    CONSOLIDATED STATEMENT OF CASH FLOWS
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    Periods ended April 30,                               Three-       Three-
    (In thousands of $)                                   month        month
                                                           2008         2007
                                                      -----------------------
                                                              $            $
    OPERATING REVENUES
      Net earnings                                        3,234        1,403
      Adjustments for:
        Amortization of property, plant and equipment       583          566
        Amortization of intangible assets                    13          124
        Amortization of other assets                          -          140
        Gain on disposal of property, plant and
         equipment                                         (211)           -
        Non-cash exchange (gain) loss                       (30)          17
        Future income taxes                               1,747         (375)
        Capitalized interest on the interest-free
         long-term debt                                       5            2
        Stock option-based compensation                      49           44
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      Net earnings adjusted                               5,390        1,921
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    Changes in non-cash operating working
     capital items
        Accounts receivable                              (5,224)      (2,128)
        Short-term and long-term holdbacks on contracts    (446)          83
        Work in progress                                    794        1,852
        Inventories                                         (69)         699
        Income taxes                                        (40)           3
        Prepaid expenses                                    (63)         280
        Accounts payable and accrued charges              1,998       (2,798)
        Deferred revenues                                   560         (794)
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                                                         (2,490)      (2,803)
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    Cash flows applied to operating activities            2,900         (882)
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    INVESTING ACTIVITIES
      Acquisition of property, plant and equipment       (2,000)        (662)
      Acquisition of intangible assets                     (267)         (70)
      Decrease in other assets                                -            2
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    Cash flows applied to investing activities           (2,267)        (730)
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    FINANCING ACTIVITIES
      Repayment of bank indebtedness                          -         (263)
      Increase in long-term debt                              -          270
      Repayment of long-term debt                          (407)        (605)
      Issuance of subordinate voting shares                   9           15
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    Cash flows applied to financing activities             (398)        (583)
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    Impact of fluctuation in foreign exchange
     rate on cash                                             3          (17)
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    Net cash inflows (outflows)                             238       (2,212)
    Cash and cash equivalents, at the beginning
     of the period                                        7,686        6,016
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    Cash and cash equivalents, at the end of the
     period                                               7,924        3,804
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    Supplemental cash flow information
      Income taxes paid                                     162           23
      Interest paid                                          58          515
      Non-cash financing and investing activities:
        Property, plant and equipment given in
         exchange for new ones                              737            -
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    Segmented Information

    The Corporation operates in the non-residential construction sector,
primarily in the United States and in Canada. Its operations include the
connections design and engineering, fabrication and selective installation of
complex steel structures, heavy built-ups as well as miscellaneous and
architectural metal works.

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                                    Revenues               Property, Plant
                            Periods ended April 30,         and Equipment
                           --------------------------------------------------
                                                                          At
                                Three-       Three-          At   January 31,
                                month        month     April 30,        2008
                                 2008         2007         2008     (Audited)
                           --------------------------------------------------
                                    $            $            $            $

    Canada                        873        1,019       34,415       32,889
    United States              24,286        9,900          295          193
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                               25,159       10,919       34,710       33,082
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    During the first quarter ended April 30, 2008, 77% of the Corporation's
revenues was achieved with three clients, each of which accounted for more
than 10% of revenues.
    




For further information:

For further information: Jean Paschini, Chairman of the Board and Chief
Executive Officer; Louis Potvin, Chief Financial Officer, (450) 965-1911,
1-800-263-7560, www.adfgroup.com; Media: Véronique Arsenault, Morin Relations
Publiques, (514) 289-8688, ext. 227; Source: ADF Group Inc.


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